As digitalization and flexible supply chains become increasingly important in the chemical industry, one way that companies are using technology to reach more customers is through online marketplaces. This trend was strengthened during the COVID-19 pandemic, when supply chain issues made finding the correct chemical for formulations challenging and adhesive and sealant manufacturers were forced to look for alternative materials for their formulations.
According to a report by McKinsey & Company, digital platforms within the chemical industry can help to address lack of transparency within a value chain as well as inefficiencies, such as product-supply planning and the execution of transactions. ASI asked Ali Amin-Javaheri, co-founder and CEO of Knowde, a digital customer experience platform that is designed for the ingredient, polymer, and chemical industries, to discuss digital sales strategies and what challenges companies might face as they move to digital marketplaces.
ASI: How has digitalization impacted the chemical industry?
Ali Amin-Javaheri: The industry is changing considerably, thanks to a generational shift on the buyer side. Today’s formulators, research and development professionals, and procurement teams are getting increasingly younger. This new generation of buyers is accustomed to doing everything online and is looking for a digital-first buying experience.
On the supplier side, chemical companies and distributors have relied on direct sales teams and trade shows for years, and this is where they have traditionally invested their resources. But in the current economic environment, companies are waking up to the need to find new ways to meet and engage customers where they are online. To do this, they must make better use of their websites and explore other digital options as well.
ASI: What should companies consider when implementing a digital sales strategy?
Amin-Javaheri: For chemists, formulators, and R&D professionals, access to information is critical. Yet a lot of product data is trapped in technical data sheets and brochures that do not live on the Internet. This information is not easy for customers to find or access. Internally, it’s difficult to use this information to feed enterprise resource planning (ERP) and customer relationship management (CRM) systems and give sales people the tools they need to be successful. Digitizing this content is the first step towards harmonizing internal systems and creating the amazing online experience that customers want.
ASI: What are the challenges companies face as they move to a digital marketplace?
Amin-Javaheri: It’s hard to build digital technology in the chemical industry, or else everyone would have done it already. It requires a major capital investment, plus knowledge and resources that chemical companies don’t have. Marketplaces enable companies to accelerate digital transformation and drive business growth. But suppliers have to understand that marketplaces don’t replace direct sales or distributors; they’re an additional channel for doing business.
Also, while a marketplace can connect suppliers to buyers from a first encounter through the completion of a transaction, there’s a human component to consider. Buyers want to connect to sellers, ask questions, and build relationships, so suppliers have to provide customer service and technical support as well.
ASI: Where do you think the most significant impacts of digitalization will be within the chemical industry in the future?
Amin-Javaheri: The biggest applications for digital technology are product discovery, customer engagement, and e-commerce. Enabling chemists, formulators, and R&D professionals to search for what they need quickly and easily, and have access to technical information will help speed up the development process and help companies get products to market faster. For procurement professionals, the key benefit is that digital technology simplifies the process of sourcing materials and helps them avoid the pain points that have been associated with the buying process for decades.
ASI: Transparency is becoming more and more important in the chemical space. How are digital chemical marketplaces helping companies be more transparent?
Amin-Javaheri: A marketplace enables users to look for products using multiple criteria and search terms. If users are looking for specific data that is not provided for a particular product by a supplier, they can contact technical experts to request more information. The advantage of a marketplace is that they can do this for multiple suppliers in one place, rather than trying to obtain this information from multiple websites, and compare the data that they need.
ASI: Can digital sales help innovation in the adhesives and sealants industry, and if so, how?
Amin-Javaheri: The process of finding, researching, testing, and getting raw materials approved has traditionally been time-consuming, complex, and frustrating. As we’ve pointed out, the majority of product information is hidden in documents, behind firewalls, outdated, or simply not available online. From company to company, the data is not standardized. Digitalization solves a lot of these problems. It makes a supplier’s website more user-friendly, and in the case of a marketplace, it can eliminate the need to search through multiple vendor websites. Users can find what they need quickly and easily, and have access to technical information and product documents from many suppliers.
Additional information about Knowde can be found at www.knowde.com.